Poor Judge of Character? : Meese Links With Scandal Tied to Quality of Friends

To his dwindling band of defenders, Atty. Gen. Edwin Meese III epitomizes the hard-working, dedicated civil servant whose personal conduct, as befits the nation’s chief law enforcement officer, is above reproach.

But since he came to Washington with President Reagan seven years ago, Meese has become embroiled in one scandal after another, including the one detonated by last week’s revelation that he failed to act when he learned of a plan to make possibly illegal payments to former Israeli Prime Minister Shimon Peres or his Labor Party in return for Israel’s support of a proposed oil pipeline for Israel’s longtime enemy, Iraq.

What accounts for Meese’s scandal-tinged seven years in the Reagan Administration?

Those who know him best blame the men he has chosen to associate with: those in the private sector who are not above using their connections with Meese to advance their own, profit-oriented interests; and Meese’s fellow conservatives within the government who falsely assure him that the charges against him are politically motivated and have no substantive merit.

“His Achilles’ heel,” said a high-ranking associate of Meese at the Justice Department, “is an inability to judge weakness or incompetence in people he relies on.”

At the root of Meese’s latest predicament is E. Robert Wallach, a former law school classmate of Meese’s who represented the financial backers of the Iraqi pipeline project and sought Meese’s help in securing favorable conditions for the pipeline’s construction.

James C. McKay, an independent counsel who was appointed by a federal court to investigate a separate scandal involving Wallach and Meese, found a memo to Meese in which Wallach outlined a plan to make payments to Peres or the Labor Party.

Lawyers for Meese insist that he is innocent of any wrongdoing. And the Israeli foreign ministry said Saturday that although Israel gave assurances that it would not oppose construction of the pipeline, “Peres was not offered and did not receive a bribe.”

Visit by Special Counsel

But McKay, who has authority to seek criminal charges against Meese, visited the White House on Friday and told high-ranking officials that his investigation of the attorney general had become very serious.

The Meese who is under investigation by McKay does not sound like the same man who was described recently by one of his senior subordinates at the Justice Department as “an honest and sincere public servant.”

“He’s in his office at 7 a.m., before I am, lugging a bulging briefcase full of material he took home to read,” this official said. “If he’s careless about some of his personal affairs, it’s only because he’s concentrating on national concerns from drug abuse to organized crime.”

Barely Gets Job

Meese, who spent most of Reagan’s first term as one of the President’s top three White House advisers, was nominated by Reagan in 1984 to be his attorney general. He barely made it.

He became the subject of a bruising Senate confirmation fight that was delayed while a court-appointed independent counsel, Jacob A. Stein, spent five months investigating allegations of financial misconduct on Meese’s part.

In particular, Stein probed loans to Meese by several people who later obtained high-level federal jobs. Although he found “no basis” for prosecuting Meese, he sidestepped ruling on whether Meese’s conduct had been proper.

The Senate ultimately voted 63 to 31 to confirm Meese as attorney general, but the number of negative votes was the largest for an attorney general since a nominee of President Calvin Coolidge was twice rejected in 1925.

Makes Vow to Panel

After Stein’s report but before the Senate vote, a seemingly chastened Meese told the Senate Judiciary Committee:

“I’ve learned a great deal from this experience, and if in the future a similar situation occurred, I would go overboard to avoid any appearance that might be construed, misconstrued, misinterpreted or even distorted.”

Since then, however, Meese’s conduct has caught the attention of another independent counsel’s investigation--the probe by McKay of possible wrongdoing in the way a small Bronx defense contractor named Wedtech obtained large Pentagon contracts.

Meese’s links to McKay’s investigation are principally through Wallach, the longtime friend and San Francisco attorney who ironically acted as a defense lawyer for Meese during the five-month Stein investigation.

Wallach was among three people indicted on charges of racketeering and conspiracy last month by a federal grand jury in New York working with U.S. Atty. Rudolph W. Giuliani, who has been conducting his own investigation of Wedtech. Wallach was accused of having taken hundreds of thousands of dollars from Wedtech as part of a scheme to seek Meese’s aid in winning large government contracts for the company.

Actively Investigated

When Wallach was indicted, McKay issued a statement saying there was “insufficient evidence as of this date” to show that Meese “knowingly participated in criminal activity.” But McKay said he was “actively investigating” other matters involving Meese, and The Times disclosed last week that those principally relate to Meese’s knowledge of Wallach’s role in promoting the Iraqi pipeline.

The pipeline project, as it happened, was scrubbed by its financial backers shortly after John M. Poindexter, newly appointed as Reagan’s national security adviser in December, 1985, ordered a review of it and then withdrew U.S. government support for it.

Nor is the Iraqi pipeline the only additional controversy surrounding Meese that has drawn McKay’s attention. Another involves the investment of Meese’s own funds.

Meese has acknowledged that soon after becoming attorney general, he and his wife, Ursula, placed $55,000 of their savings with an independent investment adviser, W. Franklyn Chinn, who had been recommended to him by Wallach.

In financial disclosure reports filed late last year, Meese reported that Chinn on several occasions in 1985 and 1986 had invested more funds on behalf of Meese and his wife than they had in their account. That practice led the Meeses to realize a total profit of about $40,000 over two years on their original investment of $55,000.

Not Aware of Funds’ Source

Meese and his lawyers insist they have no idea where the extra funds came from. It is a violation of federal securities law to buy stocks if more than half the funds are borrowed from a broker or investment adviser.

Meese reported that Chinn has refused to explain the source of the additional funds. Chinn’s attorney has also declined to answer questions from reporters.

Meese said he withdrew the funds from Chinn’s control after learning that Chinn had been a director of scandal-torn Wedtech. Chinn last month was indicted at the same time as Wallach, and both have pleaded innocent.

McKay also is investigating Meese’s actions relating to the telephone industry to determine whether he violated federal conflict-of-interest laws. Meese and his wife owned 91 shares of stock in seven regional phone companies when he became attorney general, and they retained legal title to the shares until selling them for about $14,000 last August.

Relatively Small Holding

Although the Meeses’ total Bell System investment was relatively small, a conflict question arose because Meese in 1986 endorsed legislation that would have ended federal court authority to regulate the seven “Baby Bell” companies created by the court-ordered breakup of American Telephone & Telegraph Co.

While Meese owned the stock, he also met with several executives of the Baby Bell firms who urged him to support their plea to the court for looser regulation. The Justice Department subsequently supported the plea, but U.S. District Court Judge Harold Greene rejected it. After the fact, Meese obtained a waiver letter from Peter Wallison, then counsel to the President, that allowed him to participate in the case.

If Meese has been ill-served by some of his friends in the private sector, some of his closest colleagues in the government have done little better by him, according to several Justice Department officials, some of whom still consider themselves supporters of the attorney general.

In these officials’ view, Meese’s government associates may not have led him into trouble, but they have hardly helped lead him out.

One who comes in for frequent criticism is William Bradford Reynolds, the assistant attorney general for civil rights. When the Senate rejected Reynolds’ nomination as associate attorney general, the third-ranking position in the Justice Department, Meese gave him the additional role as his chief departmental adviser.

Reynolds, one of the Justice Department’s staunchest conservatives, has repeatedly told Meese and other associates at the department that Meese’s troubles could be traced entirely to liberals and that McKay would quickly exonerate the attorney general.

Then there is the very different case of James E. Jenkins, who was Meese’s chief assistant at the White House during Reagan’s first term. Jenkins, who worked for a time as Wedtech’s marketing representative in Washington two years after leaving the government, testified in federal court last week that he convened a White House meeting in 1982 to help Wedtech obtain a $32-million Army engine contract despite Army objections to the cost.

Alien to ‘Culture of Law’

Some critics find Meese insensitive to ethical questions. “Part of the problem may be that he doesn’t come from the culture of the law, that he was never a practicing lawyer for very long, choosing politics instead,” said a former Republican appointee who served under William French Smith, Meese’s predecessor as attorney general.

Meese’s inexperience in legal practice, this source said, “may account for some of his inability to see what things will mean for people. At the very least, he seems blind to the appearances of things.”